The Indian stock market has long been governed by the Securities and Exchange Board of India (SEBI), a regulatory body designed to prevent fraudulent practices such as pump and delight diets, initiate offense and artificially inflated assessments. However, an increasing section of the public now requires a similar organism to supervise the real estate sector, where practices contrary to similar ethics persist without control.
A recent article from Reddit sparked a discussion on the parallels struck between the handling of the stock markets and the questionable tactics of the real estate industry, in particular in Bangalore. Calling on a strict regulatory body of SEBI type in real estate, the position has made parallels between developers and agents who engage in market manipulation strategies to those found in stock negotiations.
Pump and emptying vs flocking media pre-launch
One of the most commonly cited stock market scams is the pumping and dump regime, where misleading information artificially inflate the price of action before investors unload their assets for a profit. A similar tactic is observed in real estate thanks to a media threshing of the pre-launch project.
“The developers create a buzz with brilliant brochures, exaggerated growth projections and artificial rarity, which increases the demand and initial prices,” said the Reddit user. “Once they have obtained a large number of reservations, the” pump “can deflate, leaving buyers with too expensive properties.” However, due to the illiquid nature of real estate, prices do not drop as quickly as in the stock market, leaving buyers long -term overvalued assets.
Initiated trading vs developer-agent collusion
In the stock markets, the initiate’s offense involves individuals using privileged and non -public information to obtain a financial advantage. In real estate, a similar practice occurs when developers share exclusive information on future infrastructure projects and zoning changes with certain real estate agents.
“Developers can share privileged information on future infrastructure projects or zoning changes with certain agents, allowing them to buy and sell properties at inflated prices before the general public is aware,” highlights the post. “It creates an uneven playground.”
Artificial rarity and land bank
Stock market manipulators often influence prices by controlling the offer. A similar strategy is observed in Bangalore real estate through the land bank, where developers hold large expanses of land to create an artificial rarity.
“I came across owners holding their parts of the units in large companies and inflating prices,” said the Redditor. “Even for large companies, developers and landowners deliberately retain the offer to maintain artificially high prices.”
Misleading information and evaluation
The stock markets sometimes see companies inflate their value by false information. The Reddit Post says that real estate developers also induce buyers misleading on equipment, infrastructure and future development plans.
“Unfortunately, Rera (Real Estate Regulatory Authority) was not super effective here,” wrote the user. “I saw cases where the amenities were ready 5 to 6 years after moving in people.” The concern is that, although Rera exists, its application remains insufficient to combat the professional faults of the deeply anchored industry.
Manipulation of market feeling
The feeling of the market in actions can be influenced by targeted information campaigns and rumors. Likewise, developers and agents of the Bangalore real estate market use social media and advertising to feed the fear of missing (FOMO), artificial demand for demand and upward prices.
“An interesting way that someone tried to encourage emergency in me:” Sir, our systems were hacked, this is the only reason why we have not increased prices. Each day now, the system will be repaired and we will increase prices ”, shared the Reddit user, highlighting the misleading sales tactics used by developers.
The need for regulatory monitoring
With such parallels established between stock market fraud and real estate handling, the call to a SEBI type regulatory body for the housing sector becomes stronger. While Rera has been introduced to improve transparency and responsibility, criticism argues that its impact has been limited.
While real estate continues to be one of the most important investment avenues for Indian households, stronger surveillance is crucial to prevent buyers from preying deceived practices.
